KRA withdraws Sh32m tax bill in Homeland Inn mix-up

The Kenya Revenue Authority (KRA) has withdrawn a property attachment notice it issued to the wrong firm in an attempt to recover Sh32 million in unpaid taxes from Thika Road’s Homeland Inn.

The taxman issued an attachment notice to Homeland Lounge, which says it is a different entity from Homeland Inn.

Details of the mix-up have been revealed in a suit Homeland Lounge filed against the KRA to stop the auction of its property to recover Sh32 million tax.

Homeland Lounge last week agreed to withdraw the suit after the KRA admitted to have sent a wrong notice, which the taxman said had been withdrawn.

“The KRA had never demanded or notified Homeland Lounge of any arrears on taxes due by it. The notice of distress is issued to David Muriithi trading as Homeland Inn yet the goods the auctioneer is purporting to distress and has proclaimed belong to the applicant and are at its premises commonly referred to as the Homeland Lounge,” said Homeland Lounge in suit papers.

Mr Muriithi is, however, listed as a director of Homeland Lounge where he also holds one share. The other two directors, according to documents from the registrar of companies, are Duncan Ndegwa Muriithi and Joseph Gachinah Kariah.

The taxman agreed to drop its demand on Homeland Lounge, arguing that it is preparing to resend an attachment notice to Homeland Inn.

Justice George Odunga marked the suit as withdrawn following the talks between Homeland Lounge and the KRA. Homeland Inn owes the taxman Sh32 million in VAT and corporation tax accumulated between 2001 and 2013.

Homeland Lounge said it is a new firm that was only formed in July 2015.

The firm adds that it only learnt of the planned auction of its property through a newspaper advertisement published in September.